If a friend, family member or thief takes your car without permission and has an accident, you could be responsible for any resulting property damage or personal injury. Whether you are held responsible depends on your insurance policy, the state you live in and the circumstances surrounding the accident. If you're thinking about lending your car to a friend or family member or there is a chance that someone you don't trust will have access to your keys and car, the best course of action is to call your insurance company to find out exactly who is covered under your policy and to take measures to keep your car out of others' hands.
While state laws vary, if the driver is an excluded motorist or a criminal who stole the vehicle, then the insurance company will usually cover the accident. However, the insurance company may not cover the accident if you lent the car to a friend who let someone else drive or if a non-excluded motorist in your household drove your car.
An excluded motorist is an individual who lives with you but to whom you do not give permission to drive your vehicle. You must provide a statement in writing to the insurance company indicating that the person is an excluded motorist on your policy. Excluding a motorist from your policy can benefit you if someone in your household is likely to raise your insurance rates because of DUI convictions, other criminal convictions or a poor driving history. Usually, if an excluded driver takes your car without permission, you are not responsible for the damage or injury that she causes.
However, proving that the excluded driver stole your car can be difficult, and different states and insurance companies have varying policies regarding this issue. Additionally, if you do not list a person of driving age on your policy and do not indicate in writing to the insurance company that you have excluded that person as a driver, you could be liable for any damage or injury she causes.
If your vehicle is stolen, your insurance company will pay for any damage or injury the thief causes. However, if your vehicle is stolen by someone you know, such as a friend or family member, the insurance company may require you to prove that the vehicle was stolen and not simply taken without your permission. If you do not report the vehicle as stolen or do not do so until after you know about the accident, you may not receive insurance company compensation.
Most insurance policies will cover an occasional driver who borrows your vehicle with permission. However, if the driver to whom you loan the vehicle lets another person drive, and you have not given that person permission to drive, your insurance company may not cover any damage or injury he causes. Insurance companies usually only cover the person who has explicit permission to drive the car, and insurance professionals often conduct investigations to determine exactly who had the right to be behind the wheel.
State insurance laws differ drastically. In some states, drivers are required to carry uninsured motorist protection. This means that if person A takes your car and hits person B, person B's uninsured motorist coverage will pay for person B's medical and auto repair bills. However, the uninsured motorist coverage will not cover damage to your car or person A's medical bills. Also, person B's insurance company may sue your insurance company, and you or person A, to recapture payments. Other states require individuals to carry coverage that protects them no matter whose car they are driving.
- Esurance: Excluded Drivers – Our Insurance Expert Answers Your Questions
- Lawyers.com: Insurance Coverage and the Use of Others' Cars
- Allstate: What Happens When You Let Someone Else Drive Your Car And They Get In An Accident?
- Michael D. Waks: Did an Excluded Driver Have an Accident While Driving Your Car?
- Insurance Information Institute. "Background on: Compulsory Auto/Uninsured Motorists." Accessed March 6, 2020.
- Insurance Research Council. "News Release: One in Eight Drivers Uninsured." Accessed March 10, 2020.
Miranda Morley is an educator, business consultant and owner of a copywriting/social-media management company. Her work has been featured in the "Boston Literary Magazine," "Subversify Magazine" and "American Builder's Quarterly." Morley has a B.A. in English, political science and international relations. She is completing her M.A. in rhetoric and composition from Purdue University Calumet.